Loan-to-Value (LTV) is the size of your mortgage as a percent of the total property value.
The higher your deposit, the lower your LTV.
If you put down a 10% deposit on your home, that’s a 90% mortgage, or 90% LTV.
A lower LTV means lower interest rates. That’s because a bigger deposit means less risk for lenders.
A little math
Say you want to buy a property worth £250,000.
You have a deposit of £25,000, so you need to take out a mortgage of £225,000.
That makes your LTV:
225,000 / 250,000 = 0.90
x 100 = 90% LTV